Head of Settlement Company Pleads Guilty in $2M Short Sale Fraud Scheme

Jose Marinay, 52, Annandale, Virginia, pleaded guilty to conspiracy to commit wire fraud for his involvement in a short sale mortgage fraud conspiracy.

Marinaywas indicted on April 15, 2014, by a federal grand jury on multiple charges, including conspiracy to commit wire fraud. Marinayfaces a maximum penalty of 20 years in prison when he is sentenced on September 26, 2014.

According to court documents, Marinayoperated a settlement company in Annandale named Virginia Smart Choice Settlements (which is now SCS Title & Escrow). Marinay helped prepare settlement statements that contained false information relating to liens, realtor commissions, title search fees, attorneys’ fees, title insurance, recording fees, and taxes. Marinaycaused the settlement statements to be sent to mortgage lenders, and in some instances, he shredded the statements to conceal evidence of the fraudulent transactions.

According to the statement of facts filed with Marinay’s plea agreement, a co-conspirator used the settlement statements to fraudulently induce mortgage lenders to execute short sales—real estate transactions in which the mortgage lender agrees to accept a price less than the amount owed on the property—on at least seven occasions. Immediately after the short sale, the co-conspirator sold the property to a new buyer in violation of representations and agreements made with the short sale mortgage lender. As a result of this scheme, the affected financial institutions suffered losses of over $2 million.

Dana J. Boente, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas J. Kelly, Special Agent in Charge, Washington D.C. Field Office, IRS-Criminal Investigation, made the announcement after the plea was accepted by U.S. District Judge Claude M. Hilton.

This case was investigated by the FBI’s Washington Field Office and IRS-Criminal Investigation. Assistant U.S. Attorney Uzo Asonye and Trial Attorney Todd Ellinwood of the Justice Department’s Tax Division are prosecuting the case.

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